JAKARTA: The government aims to boost investment from the EU with the upcoming implementation of the Comprehensive Economic Partnership Agreement (CEPA) with the European bloc.
Industry Ministry director general for international industrial security and access development, Achmad Sigit Dwiwahjono, said the country aimed to net at least 40 percent of the EU’s direct investment in ASEAN in the next two years when the CEPA is due to be concluded. “The EU’s investment in Indonesia is currently only around 12 percent of the bloc’s total investment in ASEAN. We want it to be at least 40 percent, in line with our population size,” he said on Monday.
Indonesia’s total population accounts for around 40 percent of 600 million people inhabiting the ASEAN region.
The EU’s total investment in Indonesia amounted to only ¤22.8 billion (US$24.9 billion) of a total of ¤156.4 billion in ASEAN in 2013, according to data from the European Commission.
In the same year, Singapore received ¤93.2 billion in foreign direct investment from the EU, the data show.
EU Ambassador to Indonesia and Brunei Darussalam Vincent Guérend said he was optimistic that many more European companies would invest in Indonesia if more investment frameworks could be made more attractive.
“We believe that we really have cutting-edge expertise in many areas […], all of which would provide benefits if current constraints could be eased or removed,” he said, adding that the EU expected more sectors to be open to foreign ownership.
Sigit said the Indonesia-EU CEPA would definitely boost trade and investment relations between Indonesia and the European countries.
He added that the Indonesian government was now awaiting a response from the EU on its scoping papers for the CEPA. The papers describe the intended scope of the trade agreement.
Guérend said both the EU and Indonesia would work hard to meet the target set by President Joko “Jokowi” Widodo to conclude the negotiations in two years.
“We’re in permanent contact with the trade minister at all levels. We now have to keep the momentum in order to progress also on the substance,” he added.
The Indonesia-EU CEPA negotiation was first initiated in 2011, with the partnership forecast to add ¤9.2 billion to the value of Indonesia’s exports and 1.3 percent growth to the country’s GDP.
The partnership is set to cover market access, capacity building and the facilitation of trade and investment.
The 28-member trading bloc has already concluded a CEPA with Vietnam and is in the process of drawing one up with Malaysia.
Under the EU-Vietnam CEPA, customs duties in the two countries will be reduced to zero for all products except sensitive agricultural items, and EU companies will be able to bid on Vietnamese public offers by national ministries, state-owned enterprises and the Ho Chi Minh City and Hanoi municipal governments, among other items.
Sigit said the Indonesia-EU CEPA would cover similar clauses to that of Vietnam-EU, but he reiterated that fixed details of the partnership would go through negotiations.
Many analysts believe that the partnership between Indonesia and the EU will benefit both parties as it is mutually complementary.
Indonesia had a $3.36 billion non-oil and gas trade surplus with the EU in the January-November period of this year, down slightly from $3.76 billion in the same period last year, Central Statistics Agency (BPS)
data show.
